Netflix has officially dropped its bid to buy Warner Bros. Discovery, clearing a path for Paramount Skydance to take over the legendary Hollywood studio. The decision comes after a months-long bidding war that has kept the entertainment industry on edge.
Earlier today, the Warner Bros. Discovery board notified Netflix that a new, sweetened offer from Paramount was officially a better deal for its shareholders. Paramount’s latest proposal is valued at roughly $111 billion US, offering $31 per share in cash for the entire company. Netflix had previously offered a lower $27.75 per share, focusing primarily on the film studio and HBO streaming assets rather than the whole conglomerate.
In a joint statement, Netflix co-CEOs Ted Sarandos and Greg Peters said they would not match the higher price. They noted that while they would have been good owners of iconic brands like Harry Potter and DC Comics, the deal no longer made financial sense at the new price point. The executives described the acquisition as something that was nice to have at the right cost but not a necessity for the company’s growth.
The collapse of the Netflix deal means Paramount (backed by Larry Ellison’s billions) is now the frontrunner to acquire Warner Bros. Discovery in its entirety. This would bring major networks like CNN and HBO under the same roof as CBS and the Paramount movie studio.
As part of the exit, Netflix is set to walk away with a $2.8 billion breakup fee. These fees are common in major corporate deals and act as a form of insurance for the original bidder. Because Netflix spent months and millions of dollars on legal work and planning, the fee compensates them for the lost time and resources. Paramount has agreed to cover this payment on behalf of Warner Bros. as part of its better offer.
Despite missing out on the merger, Netflix appears to be moving forward with its own expansion plans. The company announced it still intends to spend about $20 billion on new films and series this year. Netflix also plans to restart its share buyback program, which is always a sign of confidence in its future.
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I can’t wait for 2029 when Trump and MAGA are gone and Larry Ellison has to work with people who are not backing him.